Caesars Palace has always been more than the sum of its parts. Yes, it’s just a place where people pay for rooms, eat dinner, watch shows and gamble. But there remains something compelling about the property. It may no longer be the highest-grossing on the Strip, and as of 2016 it still isn’t the oldest, but it might just be the most successful.
Unlike the older Flamingo and Tropicana hotels, Caesars Palace has, since its 1966 opening, been near the top echelon of Strip casinos. From the first throw of the dice until the 1989 opening of Steve Wynn’s Mirage (which was at least partially inspired by Caesars), it was indisputably the top joint in town. That 23-year run—an eternity in Las Vegas years—likely won’t be matched. The Mirage had nine years on top, replaced by Wynn’s own Bellagio. After the 2005 opening of Wynn Las Vegas, things get less clear. Did Bellagio retain the crown of the premier Vegas casino? Or did the master take it back? In any event, there are several claimants for the top spot—Wynn, Bellagio, Aria, the Venetian, and, still, Caesars Palace. With the growing diversity of Las Vegas’ attractions and clientele, it seems unlikely that another undisputed champion will emerge.
Caesars, however, is more than a successful casino: It has become a global brand. Thanks to decades of special events as well as a recognizable, marketable name and logo, Caesars is in its own class. At the core, though, the most remarkable thing about Caesars Palace is that it redefined what a casino—and the tourist core of Las Vegas—could be. Founding visionary Jay Sarno wanted to build something that smashed every idea of what Las Vegas was. Caesars (or the Desert Cabana, as it was known in its earliest incarnation) would offer gambling, and lots of it, but unlike other properties, it would offer much more: the chance to live a fantasy, even for just a few days. Sarno wanted visitors to not just gamble and vacation, but to live another life, to be the person they aspired to be.
And that, in a nutshell, launched modern Las Vegas.
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Sarno conceived the idea for caesars after a February 1963 Flamingo junket. It was the die-hard gambler’s first stay in Las Vegas, and he was completely underwhelmed. Convinced he could do better, Sarno persuaded Jimmy Hoffa—who had already helped him build Cabana hotels in Atlanta, Dallas and Palo Alto, California—to arrange a Teamster loan. The concept was impressive; financing a $19 million resort with no collateral and less good will was audacious. But a $10 million guarantee from the Teamsters Central States Pension Fund only got him halfway to the finish line. After traveling the country looking for investors, he met Baltimore insurance executive Nate Jacobson, who gladly traded his Maryland business for the title of president of Caesars.
Getting the money to build Caesars wasn’t easy. It was the last casino built before the corporate rules of casino finance. Lacking access to banks and other mainstream lenders, casino builders from Ben Siegel to Moe Dalitz solicited investments from those who knew the gambling business. This group fell into two subgroups with considerable overlap: big gamblers and those involved in illicit gambling. Sarno and Jacobson successfully recruited nearly 60 investors. Some commitments came with strings attached; one was Miami bookmaker Jerry Zarowitz (who opening-day valet Jim Dunbar remembers as “a real casino man”). He became the official, albeit unlicensed, boss of the casino.
The opening of Caesars Palace (see “How Jay Sarno Made Las Vegas,” October 9, 2013) was a triumph fit for a Caesar. A host of Hollywood celebrities and dignitaries attended. But when given the microphone, Sarno singled out one man for praise: Jimmy Hoffa. “Only someone with his class, his integrity,” Sarno said, “could have added a little
Greco-Roman class to Vegas.”
Caesars would become the biggest success in Las Vegas casino history up to that point.
“Every wiseguy in the world, you know—gambler, action Jackson guy, everybody—was there,” Steve Wynn said of Caesars’ opening. As Howard Hughes was beginning to foist corporate ownership on Las Vegas, there was an alternative. “All of Nate Jacobson’s gambling buddies that were Flamingo customers and Sands customers, boom, right into Caesars,” Wynn elaborated. “It was perfect timing. Good night, Sands. Good morning, Caesars.”
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But there was more to caesars than met the eye. Very quickly, workers and managers gelled into something more than a workplace.
“Ash Resnick,” longtime dealer Bennie Figgins recalls, “he was my man.” Figgins was $200 short of cash when buying his house. Resnick walked him to the cage and told the cashier, “Give him $200 and he’ll pay it back when he’s ready.” It was a helping hand, but not charity, given to a trusted friend. “That’s the way it was back then,” Figgins says. “It was just like a big family here. You didn’t have to worry about nothing because they’d take care of you.”
The executives got their hands dirty, too. Figgins remembers food and beverage vice president Billy Weinberger pulling his coat off and jumping in to assist a backed-up bartender during a banquet. Figgins, then working as a porter, removed his coat and started helping out, too. “That stuck with me ever since,” he says.
Not that the Caesars managers, who’d learned the ins and outs of gambling in less-than-legal settings, were a bunch of softies. Zarowitz insisted his word be law. Showroom server Pete George, for example, remembers that Mr. Z. demanded Circus Maximus shows end exactly on time—not five minutes later, not five minutes sooner—and that patrons be back out on the casino floor, pronto.
“So we started taking the tablecloths off the tables the second the curtain fell,” George remembers. Since music from the showroom could be heard from Zarowitz’s perch in the casino, any deviation from the schedule had immediate repercussions. Once, George recalls Zarowitz demanding to know why Tom Jones was still performing after the show’s scheduled end. Seconds later, the curtain dropped on Jones mid-song, the tablecloths were coming off and guests were heading out the doors. “He was strictly business,” George says.
Zarowitz’s focus on detail, combined with Sarno’s fantasy world, created an incredibly popular and profitable casino. Even with the highest room rates in Las Vegas by a large margin, the hotel was consistently packed and the games full.
Despite the early success of Caesars, the three principals could not get along. Sarno, Jacobson and Zarowitz each wanted to call the shots. With both Nevada’s Gaming Control Board and the U.S. Department of Justice increasingly asking about the possibility of skimming, Jacobson and Sarno looked for a buyer. They came close to selling the casino to the Denny’s restaurant chain in late 1968, but that deal fell through. Meanwhile, the Gaming Control Board ratcheted up the pressure, threatening $3 million in fines after Caesars was found to be hosting a group of 12 (reputed) members of the Kansas City underworld.
So when another fast-food chain, Lum’s, owned by the Perlmans, came calling in 1969, the Caesars owners were eager to close. For a promised $58 million, the Florida-based, publicly traded company took the keys to Caesars’ empire. Jacobson built Lake Tahoe’s King’s Castle casino, and Sarno immersed himself in Circus Circus, which he had opened the previous October.
The Perlmans brought corporate ownership to Caesars Palace. The casino proved so profitable that Lum’s soon sold off all its other interests and renamed itself Caesars World. Caesars Palace simply had so much more profit potential than Lum’s other businesses—including not just its flagship hot dog and beer restaurants, but also a Rowan and Martin’s Laugh-In-themed restaurant and a chain of Army-Navy stores—that the Perlmans chose to get out of the food franchising business and double down on resorts.
“[Clifford Perlman] was very personable,” valet Dunbar remembers. “The most personable chairman we had.”
The new regime wasted no time in expanding Caesars, opening the 222-room Centurion Tower on August 6, 1970. Farther afield, Caesars World bought two Poconos honeymoon resorts in Pennsylvania and leased Florida land with plans to build a hotel and condominium complex. And in 1972, Caesars World bought the Strip’s Thunderbird casino, which it planned to replace with the 38-story, 2,000-room Mark Anthony hotel. Geared toward the convention and family markets, the Mark Anthony would have complemented Caesars’ focus on the high-end gambling segment. After sinking more than $2 million into the project, the company abandoned it in 1975 after being unable to line up suitable financing.
Expansion at Caesars Palace, though, continued apace with a 361-room addition to the original tower opening in early 1974. Perhaps not wishing to abandon the Mark Anthony’s convention aspirations, Caesars Palace added 50,000 square feet of convention space the following year.
Caesars became a true globe-spanning brand in those years. Sports, as stadium proponents argue today, was one way to build a brand. With little prospect of luring a big-league team, Caesars borrowed a page from the Desert Inn’s playbook. Moe Dalitz and Allard Roen, looking to raise Las Vegas’ profile in 1953, hit upon the idea of hosting the Tournament of Champions on the new Desert Inn Golf Course. With coverage from NBC, the tournament gave the Desert Inn and Las Vegas loads of free publicity—until new DI owner Howard Hughes evicted the popular event from the course in 1967.
Caesars Palace didn’t have the ability to build its own golf course, but tennis, which could be played in considerably less space, was a great match. It helped that new Caesars World CEO Perlman was a tennis buff. The sport’s popularity was rising in 1972 when Caesars began hosting the Alan King Tennis Classic. Until 1985, the tournament brought some of the era’s biggest names—Arthur Ashe, Jimmy Connors, Bjorn Borg, Ivan Lendl—to town. With Pancho Gonzales as the resident pro, tennis was always on the table (or court) at Caesars.
Boxing made an even bigger splash internationally, debuting at Caesars in October 1969, when the American amateur team took on the Soviets in a series of 11 bouts. It took a few years to gain traction, but starting with 1976’s George Foreman-Ron Lyle battle for the NABF heavyweight title, Caesars became synonymous with elite boxing. Big fights drew both media attention and high rollers—two things the casino thrived on.
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Meanwhile, Caesars kept growing. The Fantasy Tower (now the Forum Tower) opened in November 1979, followed the next month by an Omnimax Theater, which projected films onto the interior of a geodesic dome. This was done, said vice president Harry Wald, to tap into the 45 percent of visitors who came to Las Vegas primarily for entertainment, not gambling. Wald boasted that more television emanated from Caesars than any other non-network location in the world. Caesars Palace, if executives had their way, would be everywhere at all times.
At the same time, the way guests entered Caesars changed. Originally, you drove to Caesars; part of the reason for the large setback and fountains was to give guests a buffer between the real world of traffic and hassles and Caesars’ fantasy land. But as pedestrians began to walk the Strip, Caesars was an island unto itself. So it added people movers to whisk guests from the street to the casino.
Caesars was expanding in a more tangible way as well. In 1979, Caesars World took over the lease of the Park Tahoe casino in Lake Tahoe, renaming it Caesars Tahoe. In the same year, the company pushed into a more distant province. Though opening the new casino was a tactical victory, the aftermath would force out the reigning emperors of Caesars World.
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Atlantic City, after the opening of Resorts International in 1978, was emerging as the world’s hottest casino market. Caesars opened its Boardwalk Regency, a 527-room casino hotel, there on May 24, 1979. But New Jersey regulators, dissatisfied with the company’s dealing with Miami figures allegedly associated with Meyer Lansky, refused to issue the company a permanent casino license. They did allow Caesars to open its Atlantic City casino under a temporary license, provided that chairman Clifford Perlman took a leave of absence and the company severed all business relationships with those the regulators found objectionable. In late 1980, Caesars World agreed, as part of its deal to receive a permanent license, that both Clifford and Stuart Perlman—the company’s founders and largest shareholders—would leave. In 1982, the Perlmans, who had been on unpaid leaves of absence, lost their appeals and officially exited the company, selling their stock for $99 million.
A new leadership team was already waiting by the time the Perlmans left. Terry Lanni, who had joined Caesars World in 1977, was instrumental in getting the $60 million Aetna loan that financed the 1979 expansion. This was the first investment by a major institutional lender in a casino and a milestone in the gaming industry’s corporate legitimation.
“Nice gentleman, nice family,” Dunbar recalls of Lanni. “He was different from the earlier people. Corporate. Had never done anything wrong.” George (the dealer) recalls Lanni coming to Caesars after impressing Harry Wald while serving in Gerald Ford’s 1976 presidential campaign. “So when they opened in Atlantic City,” George says, “they sent Terry Lanni there.”
Lanni served as the chairman of the Boardwalk Regency. With the Perlmans’ departure, he became president and chief operating officer of Caesars World.
Henry Gluck, who replaced Clifford Perlman, had previously guided toilet system manufacturer Monogram Industries, and would do much to make Caesars Palace into the property it is today. In 1985, the property started a five-year modernization and renovation program that saw the addition of the Olympiad Race and Sports Book, a World of Caesar diorama, a major casino expansion, La Piazza Food Court, a 1,500-space parking garage and a third people mover on the property’s north edge that opened shortly after the debut of The Mirage next door.
Caesars Palace was building an empire like no other.
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Gluck’s changes in the 1980s were only the beginning. Watching newer, larger casinos grow, he plotted a new course and opened the Forum Shops in 1992, which featured not only 150 stores, but a fountain with animated versions of Bacchus, Apollo, Plutus and Venus partying down, complete with lasers and sound effects. The mall quickly became one of the most profitable in the country. Wolfgang Puck’s Spago, located in the Forum Shops, ignited the celebrity-chef craze on the Strip. At the same time, Gluck’s management team did not neglect gamblers, launching its Emperors Club slot loyalty program, which allowed gamblers the chance to win Roman Rewards, seats in free slot tournaments and receive a subscription to the bimonthly Caesars Headlines magazine.
The growth of gambling nationally made gaming companies valuable acquisition targets. The ITT Corporation, with divisions ranging from manufacturing to insurance to hospitality (Sheraton hotels), bought the Desert Inn from Kirk Kerkorian in 1993, whetting its casino appetite. In December of the following year, ITT Chairman and CEO Rand Araskog announced plans to buy Caesars World for $1.7 billion. Assets included not only Caesars Palace, but also casinos in Lake Tahoe and Atlantic City, a shared management contract for a government-owned casino in Windsor, Ontario, four Poconos honeymoon resorts and a contract to operate casinos from Crystal Cruises.
When the purchase was consummated in March 1995, Caesars became part of the Sheraton reservation system, something that employees greeted fondly. “We could stay at any hotel in the system for $35 a night,” Figgins recalls. “We traveled the world.”
ITT continued Gluck’s expansion program, opening Caesars Magical Empire in 1996 and the Forum Shops’ second phase and the 1,134-room Palace Tower the following year. The company’s hotels and casinos merged with Starwood in 1998; that hospitality giant did not have much appetite for gambling, and sold Caesars Palace (and its sister properties) to Park Place Entertainment the next year.
Park Place folded Caesars into its existing casino empire, which eventually included Bally’s, Paris, the Flamingo and the Las Vegas Hilton. That’s a lot of casino space, but the new owners recognized that Caesars Palace was something special. In early 2004, the company changed its name to Caesars Entertainment. President Wally Barr said the Caesars name had almost universal recognition. Sarno’s vision, Perlman’s marketing and Gluck’s strategy had paid off: Caesars was a global brand.
At the same time, Park Place/Caesars brass was making big changes at the Palace. In 2000, longtime culinary favorites Bacchanal and Palace Court closed, as did the Omnimax Theater and the Circus Maximus showroom. Each of these closings was to make way for newer, bigger, better attractions that would help the property compete in the age of the megaresort.
In the same year, the Sarno block façade came off the Roman, Centurion and Forum towers, replaced by the Greco-Roman columns that adorned the Palace tower. As themed resorts grew in popularity, this was an attempt to give Caesars a more explicitly Roman exterior—a move that, in retrospect, was likely misguided. Within a decade, themed properties such as Treasure Island and Luxor were stepping back their more exotic (or kitschy) design elements.
The new Caesars Entertainment brought a major addition to its Strip flagship. On March 25, 2003, the Colosseum opened. The $95 million, 4,000-seat replacement for Circus Maximus was built specifically for Celine Dion. Some were skeptical that Dion’s pop power would prevail on the Strip, but her show and the venue were a smashing success, boosting earnings at Caesars 65 percent. The Phase 3 expansion to the Forum Shops added 304,000 square feet of retail space in 2004, bringing the mall up to the Strip and giving Caesars another attraction.
Caesars Entertainment’s hold on Caesars Palace did not last long. In early 2005, national casino powerhouse Harrah’s Entertainment swallowed up Caesars, making Caesars Palace the top property in a national network of mostly mid-market casinos. Harrah’s continued the previous ownership’s expansion, opening the 949-room Augustus Tower in August.
Harrah’s Chairman and CEO Gary Loveman claimed the previously mass market–oriented company was dedicated to keeping Caesars’ standards up: “The power of the Caesars brand,” he said shortly after the acquisition, “lies in the opulence of the Caesars Palace experience, and we are absolutely committed to maintaining and strengthening its reputation.”
But an ill-timed leveraged buyout in 2007 ultimately dragged the company into bankruptcy and complicated immediate expansion plans. The company weathered the recession and went into growth mode again, changing its name in 2010 back to Caesars Entertainment. It added the upscale 668-room Octavius Tower (its sixth) in January 2012, bringing the resort’s room count to 3,960 and capping an $860 million expansion. Adjusting to the new Las Vegas, Octavius rooms started at 550 square feet and featured tech amenities such as in-room media hubs and a dedicated app.
Work then began on reimaging Caesars’ existing towers. In 2013, the Nobu Hotel—an extrapolation of chef Nobu Matsuhisa’s restaurant (an outpost of which, naturally, opened in Caesars)—debuted. This year, a to-the-studs renovation turned Sarno’s original Roman Tower into the Julius Tower (see “Caesars Room Art Gives Guests Something to Gawk At,” June 23).
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Today’s Caesars Palace is very much the fulfillment of its past. Superstar entertainment has made the jump from Circus Maximus to the Colosseum. As in Sarno’s original, its rooms and suites include some of the city’s most luxurious—and expensive (its Villa Suites run at least $40,000 a night). And the legacy of good food and culinary celebrity that started with Nat Hart at the Bacchanal and continued at the Palace Court and Wolfgang Puck’s Spago is quite evident, with chefs such as Guy Savoy, Bobby Flay, Nobu Matsuhisa and Gordon Ramsay, and restaurants such as Old Homestead, Rao’s and MR. CHOW.
For Caesars’ 50th anniversary, President Gary Selesner has turned the focus back to the past, with multimedia displays throughout the resort highlighting its history. He is quick to give credit to those who made this milestone possible. “Caesars Palace set the standard for luxury when it first opened and has continuously evolved through the past five decades to remain a leader on the Las Vegas Strip,” he said. “As we celebrate the legendary resort’s rich history of ‘firsts,’ we know that none of it would have been possible without employees dedicating themselves to treating every guest like a Caesar for the past 50 years.”
So what would Sarno think about his challenge to the Vegas status quo today? Few people have a better perspective than Dunbar, with whom Sarno commiserated about the complications and costs of the casino’s construction.
“I think he would be incredibly proud of what he started,” Dunbar says. “It was his baby, and it just gets better all the time.”
